Garnering a major spotlight with its extreme shortage due to its limited production, Semiconductor’s manufacturing industry has impacted nearly every sector with its lack of supply. But recent Government Schemes to Promote Electronics Manufacturing in India has vitally turned heads.
Almost every technology-based sector has to either delay their products dispatch or is witnessing a major disconnect in the supply chain that has led to inadequate supply of products in the market.
Being one of the largest consumer markets of digital products, India is also facing a major disharmony in the demand and supply network.
This situation has again reminded India about their inadequacy in fulfilling their own market needs, how dependent our industries are on electronics imports and how self-reliance is the much-needed step our country requires avoiding any future struggles. Hence few states that self-reliance is the only way out and hence Government Schemes to Promote Electronics Manufacturing is the way ahead.
Predicting the gaps and inadequacies India was witnessing, the Government of India already took some measures as they started advocating policy slogans like ‘Make In India’, ‘Atmanirbhar Bharat’ and many more.
And though the results were very moderate, to say the least, the fact that came to light showed the country’s too much dependence on foreign capital for investment and the acute lack of implementation of the policy at ground level.
Government Schemes for Electronics Manufacturing picked their pace in 2020 when India’s relation with China deteriorated as the situation of war emerged followed by the events surrounding China’s aggressive political and business tactics that got coupled with their poor handling of the containment of the coronavirus spread.
These events propelled India to look for alternate avenues of business and trade and also gave the much-needed push to Government Schemes for Electronics Manufacturing as India took a splendid step by banning Chinese apps as well as products that flooded our market with inferior quality and low cost electronics products and in turn, also boosted ‘Make In India 2.0’ that further protected the domestic manufacturers.
Before going further about discussing the success of Government Schemes for Electronics Manufacturing, let’s acquaint ourselves with the various schemes introduced by the Government of India to uplift our fledgling Electronics Manufacturing industry to bring them to a global stage.
Government Schemes for Electronics Manufacturing
Aiming to project India as a global hub for Electronics System Design and Manufacturing (ESDM) and pushing the vision of the National Policy on Electronics (NPE) 2019 further, the Government of India introduced three major schemes, namely Production Linked Incentive Scheme (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters Scheme (EMC 2.0) that were notified in April 2020.
Another major fourth scheme, namely the Production Linked Incentive Scheme (PLI) for IT Hardware was added to their collection in March 2021 to further boost the Electronics sector of the country.
Let’s dive into the first major Government Schemes for Electronics Manufacturing.
PLI for Large Scale Electronics Manufacturing
Coming at the top of the list in Government Schemes for Electronics Manufacturing, this scheme aims to offer a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain that includes mobile phones, electronic components and ATMP units. Production Linked Incentives of up to INR 40,951 crores were to be awarded over 5 years.
PLI for IT Hardware
Another Government Schemes for Electronics Manufacturing, it aims to offer a financial incentive to boost domestic manufacturing and attract large investments in the IT hardware supply chain.
Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)
SPECS aims to strengthen the value chain for the manufacturing of electronic products in India comprising electronic products like electronic components, semiconductor or display fabrication units, ATMP units, specialized sub-assemblies and capital goods for the manufacture of these mentioned goods. Offering the financial incentives of 25% on capital expenditure in new units and expansion/ modernization/ diversification of existing units, this Government Schemes for Electronics Manufacturing is open for 3 years from the date of notification.
Modified Electronics Manufacturing Clusters Scheme (EMC 2.0)
Under this Government Schemes for Electronics Manufacturing, Government will be supporting the creation of quality infrastructure with common facilities and amenities, like Ready Built Factory (RBF) sheds or Plug and Play facilities.
This scheme offers financial assistance of 50% of the project cost that will be later provided to EMC projects having worth up to INR 70 Cr for every 100 acres of land while the other 75% of the project cost will be given for Common Facility Centres (CFCs) with a limit up to INR 70 Cr.
Progress in Government Schemes So Far
After the successful launches of these Government Schemes for Electronics Manufacturing as these schemes offered turnover linked incentives to approved investors, once they met the specified investment, capacity, and turnover criteria, many businesses got lured to take advantage of these offers and came forward to expand their businesses.
According to the latest Government reports shared with the public some major developments were seen on this front while some others neared their closure.
Under the PLI schemes that spanned mobile phones, drugs and medical devices, several businesses tried their hands in this scheme that attracted investments of over US$ 5 billion.
Further, another scheme that aimed at the IT hardware sector also attracted investments worth US$ 35 million, thus reducing a major chunk of dependence on imports in the electronics sector.
Though many Government Schemes for Electronics Manufacturing are still ongoing and some at the evaluation stage only, Production linked incentives seem to be the main driver for major government grants in India.
The government of India is already planning to extend these incentives propaganda to lure more businesses to invest in major segments like semiconductor fabs, display electronics market fab, wearables, IoT devices and drones.